What Killed off the Giant Brands? – Part 1

Extinction is referred to the end of an group of organisms or normally a species. It usually is the moment of death of last individual or species. It is very sad moment to watch. The purpose of this article is to understand and learn about mistakes,educate ourselves & always remember this:

The history always repeating itself!

“There are only patterns, patterns on top of patterns, patterns that affect other patterns. Patterns hidden by patterns. Patterns within patterns.

If you watch close, history does nothing but repeat itself.” ( Chuck Palahniuk -Survivor)

In business world there were many giants brands that went under and extincted for many different reasons which I want to talk about more and find out why that happened against all odds and to understand What Killed off the Giant Brands?

The extinction of the brand could be being shrunken dramatically , grown obsolete, or been acquired by rivals & below are some giant brands and why they have died:

  • MOTOROLA: The iconic phone company that brought flip phone to the world is dead. Company has lost $4.3 billion from 2007 to 2009 & then they have decided to use the typical way of salvation of dividing into two independent public companies which are solution and mobility on 2011 which is the ritual way for many mobile vendors. Motorola Solutions is generally considered to be the direct successor to Motorola, Inc. as the reorganization was structured with Motorola Mobility being spun off. The brand was bought by Google in 2012, and then sold on to Lenovo two years later.Motorola was once perhaps the most famous brand in mobile phones, making many people’s first handset just died.one of stories was that couple of Motorola directors on a cruise thought it would be great if they could make calls while on holiday, and thus space communications biz Iridium was born.The name came from the element Iridium, which has an atomic weight of 77. This was the expected number of birds to form the satellite constellation, launched between 1997 and 1998 (with network of 66 satellites giving global coverage). One other overestimation was the number of people who would want to buy the bulky and expensive SAT phones.Motorola spent $6bn on the project but when the separate Iridium company went into Chapter 11 bankruptcy protection in 1999 it was bought by private investors for $25m. So to summarize, below are the top reasons why Motorola has failed:
  1. Iridium Project.
  2. They missed the movement to 3G.
  3. Motorola got out of the right business at the wrong time.
  4. Motorola didn’t grow. they stopped begin innovating & didn’t execute.
  5. Motorola never had the sense of urgency & just ran out of time.
  6. Where’s the differentiation? The marketing was all wrong & the price positioning was not correct.

” If all else fails, launch a new one! “

” The fall of a gaming giant “

  • ATARI: It is one of the most well known companies and almost you can not find anyone that won`t be familiar with their products.It is truly a nostalgic brand. To the few that might does not know Atari, it was an American video game developer and home computer company founded in 1972. it was the fastest-growing company in the US, its Atari 2600 gaming console shaping up to be the world’s best-selling console. The company eventually was closed and its assets split in 1984. Some deadliest mistakes that caused fall of the giant gaming brand are as follows:
  1.  E.T Video game heavy blow. In 1982, Atari majorly hyped up two video games that flopped on release. One of the games was E.T , which is today considered to be the worst video game ever made. Atari buried millions of unsold E.T. game cartridges in the desert, and in 1984.
  2. The video game crash of 1983, known as Atari shock in Japan.
  3. Rise of Nintendo in the console market.
  • AIWA: The company was founded in 1951 manufacturing microphones, and changed its name to Aiwa Co., Ltd. in October 1959.The company was a leading manufacturer of audio products, including headphone stereos, mini-component stereo systems, portable stereo systems, mini-disc players, CD and cassette players, and car stereo systems throughout the 1970s, 1980s and 1990s.The company also made and sold video products, such as VCRs, color televisions, DVD players & digital satellite television tuners. The company slid towards bankruptcy until it was purchased by competitor Sony Corporation.In January 2003, Sony announced the re-branding and relaunch of Aiwa and later in 2006, Aiwa products were discontinued and no longer sold in the market. As of January 2014, the Aiwa website still existed to provide customer-support telephone numbers for some territories and regions, but it also contained many broken links and blank pages. So why that happened?
  1. In 1981 Aiwa entered the video area for the first time & began production of videocassette recorders.following the lead of its parent, Aiwa adopted the Sony Betamax format. Although introduced a year earlier, the Betamax lost out to the VHS format in a battle to determine which would be the industry standard.
  2. Products produced in Japan got more expensive by increasing the production cost and caused massive impact on export markets. By the years of 1986 Aiwa was in the red for the first time in eight years.
  3. Misunderstanding the market.
  4. Lack of proper and effective,long term business model.

” Japanese consumer electronics giants are in the verge of extinction”

  • Not that long ago, Japanese companies such as Sony, Panasonic, and Sharp were made virtually everything in the consumer electronics world, from televisions to microwaves and digital music players & also considered as high quality premium brands. Today the Japanese consumer-electronics giants have largely been reduced. Some has died and some still struggling to survive or end the verge of extinction. Ironically South Korea’s brands which they used to be low quality, low-cost player in the market has actually been far more successful compared to their Japanese rivals. earlier even the most optimistic employee in in South Korea could dream such a day as today. The Samurais lost their battle and crushed. What are the major reasons for their downfall?
  1. They failed to pay attention to shifting trends.
  2. Lack of adaptation.
  3. Rising value of the Japanese yen, which made products exported from Japan more expensive abroad and cut into margins.
  4.  Being too insular and focused on their home market.
  5. The Japanese were to late mobile market and missed it.
  6. Lack of innovation.

 This is the end of part one, Hope you`ll like it and there are more are to come!

Iman Soltani

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